Learnings of an Oracle Apps Consultant

Monday, August 11, 2008

Oracle E-Business Tax: Regime to Rate Flow in Oracle R12
In Oracle Release12, there has been some very significant changes, one among them being how we define tax. E-Business Tax is now a single point where we define our taxes for all the sub-ledger modules. In this article I will try to do a sample Tax setup using the Regime to Rate Flow of Oracle EBusiness Tax in the Tax Manager responsibility. Creating a Tax Regime In Oracle E-Business Tax, a Tax Regime is the system of regulations for the determination and administration of one or more taxes. 1. Navigate to the Create Tax Regime: Navigation: Tax Configuration Tax Regimes Click the Button Create 1. Enter a new tax regime based on the following information: Tax Regime Code: TESTREGIME1 Name: Test Regime1 Regime Level: Country Country Name: United States Parent Regime Code: Blank Effective From: 01-JAN-1950 Effective To: Leave Blank

 Used to group Regimes: Unchecked 1. Expand the Controls and Defaults region Allow Tax Recovery: Checked Allow Override and Entry of Inclusive Tax Lines: Unchecked Allow Tax Exemptions: Checked Allow Tax Exceptions: Checked Tax Currency: USD Minimum Accountable Unit: 0.01 Rounding Rule: Nearest Tax Precision: 2 (default) 1. Click on Button Continue 2. Enter tax regime configuration options: Party Name: Vision Operations (Note: Select the Operating Unit owning Tax Content party type) Configuration for Taxes and Rules: Common Configuration with Party Overrides Configuration for Product Exceptions: Party-Specific Configuration Effective From: 01-JAN-1950 Effective To: Leave blank 3. Click on Button Finish 4. You will get the message The tax regime was successfully created Creating a Tax 1. Navigate: Tax Configuration Tax Regimes 2. Search for the Tax Regime you created above using the filter criteria of Country as United States and Tax Regime Code as TESTREGIME1 3. Click on button Go 4. Click on icon Regime to Rate Flow

5. Click on button Create Tax

1. 2Create a new Tax as per information mentioned below: Tax Regime Code: TESTREGIME1 (defaults) Configuration Owner: Global Configuration Owner Tax Source: Create a new tax (defaults) Tax: TESTTAX1 Tax Name: Test Tax1 Tax Type: SALES Effective From: 01-JAN-1950 (defaults) Effective To: Leave blank

 Geography Type: STATE Parent Geography Type: COUNTRY Parent Geography Name: United States Tax Currency: USD (defaults) Minimum Accountable Unit: 0.01 (defaults) Rounding Rule: Nearest (defaults) Tax Precision: 2 (defaults) Exchange Rate Type: Blank 2. Click on Show Controls and Defaults 3. Enter the details as per information mentioned below Allow Override and Entry of Inclusive Tax Lines: Unchecked Allow Tax Rounding Override: Unchecked Allow Override for Calculated Tax Lines: Checked Allow Entry of Manual Tax Lines: Checked Use Legal Registration Number: Unchecked Allow Duplicate Tax Registration Numbers: Unchecked Allow Multiple Jurisdictions: Unchecked Tax Accounts Creation Method: Create Tax Accounts (defaults) Allow Tax Exceptions: Checked (defaults) Allow Tax Exemptions: Checked (defaults) Tax Exemptions Creation Method: Create Tax Exemptions (defaults) Allow Tax Recovery: Unchecked

1. Click on Button Apply 2. You will get the message The Tax has been successfully created 3. Return to Tax Regimes. Click on Expand All 4. Click on icon Create Tax Status 5. Enter the following: Tax Status Code: TESTSTATUS1 Name: Test Tax Status1 Click on Button Apply Check as Default Tax Status: Checked Default Status Effective From: 01-Jan-1950

6. Click on button Apply 7. You will get the message The tax status was successfully created.

Create Tax Rates 1. Go back to the Regime to Rate Flow 2. Click on Expand All. 3. Click on icon Create Tax Rate. Enter the Tax Rates based on information mentioned below: Tax Regime Code: TESTREGIME1 (defaults) Configuration Owner: Global Configuration Owner (defaults) Tax: TESTTAX1 (defaults) Tax Status Code: TESTSTATUS1 (defaults) Tax Jurisdiction Code: Blank

 Tax Rate Code: TESTRATE1 Rate Type: Percentage (defaults) Percentage Rate: 10 Effective From: 01-JAN-1950 (defaults) Effective From: Leave blank 1. Click on icon Rate Details. Enter the Tax Rate Details based on information mentioned below: Tax Rate Name: Test Sales Tax Rate1 Tax Rate Description: Test Sales Tax Rate1 Set as Default Rate: Checked Default Effective From: 01-JAN-1950 Default Effective To: Leave blank Allow Tax Exemptions: Checked (defaults) Allow Tax Exceptions: Checked (defaults) Internet Expenses Enabled : Checked 1. Click on the button Apply to return to the Create Tax Rate page. 2. Click on the button Apply to return to the Regime to Rate Flow page 3. You will get the message The Tax Rate has been successfully created. Creating Tax Jurisdiction 1. Navigate: tax Configuration Tax Jurisdiction 2. Click on button Create. Enter the Tax Jurisdiction details based on information mentioned below: Tax Jurisdiction Code: TESTJUR1 Tax Jurisdiction Name: Test Tax Jurisdiction1 Tax Regime Code: TESTREGIME1

 Tax: TESTTAX1 Geography Type: STATE (pick from list!) Effective From: 01-JAN-1950 Effective To: Leave Blank Geography Name: CA Precedence Level: 300 (defaults) Collecting Tax Authority: Blank Reporting Tax Authority: Blank Set as default Tax Jurisdiction: Yes (defaults) Default Effective From: 01-JAN-1950 Default Effective To: Leave blank 1. Click on the button Apply to return to the Regime to Rate Flow page 2. You will get the message The tax jurisdiction was successfully created. Creating Tax Accounts 1. Navigate: Tax Configuration Taxes 2. Search for the Taxes that we created just now using the following filter criteria: Country Name: United States Tax Regime Code: TESTREGIME1 Tax: TESTTAX1 3. Click on the button Go. Then click on icon Update. 4. Click on button Tax Accounts. 5. Enter the Ledger as Vision Operations (USA) 6. Click on button Create 7. Enter the Tax Account details based on following information: Operating Unit : Vision Operations

 Tax Expense: 01-210-7710-0000-000 Tax Recoverable/Liability: 01-000-2220-0000-000 1. Click on button Apply and return back to Tax Accounts page. 2. Click the button Apply, to return to the Update Tax page. 3. Click the button Apply, to return to the Taxes page. 4. You will get the message The tax was successfully updated. Creating Tax Rules 1. Navigate: Tax Configuration Tax Rules 2. Access the rule type by filtering on the following criteria: Configuration Owner: Global Configuration Owner Tax Regime Code: TESTREGIME1 Tax: TESTTAX1 3. Click on button Go. Then click on Expand All. 4. Set the following values corresponding to the Rule Types: Determine Place of Supply: Ship To Determine Tax Applicability: Applicable Determine Tax Registration: Bill From Party Determine Taxable Basis: STANDARD_TB Calculate Tax Amounts: STANDARD_TC

Making Tax Available for Transactions 1. Navigate: Tax Configuration Taxes 2. Select the Tax created based on the following filter criteria: Country Name: United States Tax Regime Code: TESTREGIME1 Tax: TESTTAX1 3. Click on button Go. Then click on icon Update on the TESTTAX1 row. 4. Check the box Make Tax Available for Transactions

1. Click on button Apply. 2. You will get the message This tax does not have an exchange rate type. Are you sure you want to enable this tax? having options Yes and No. Click on Yes 3. You will get the message The tax was successfully updated. Test your Tax Setup by creating an Invoice in Payables /Receivables or creating a Purchase Order.